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Filing Bankruptcy in NM: Understanding the Process and Benefits
Filing for bankruptcy in New Mexico (NM) can be a strategic move for those overwhelmed by debt. Understanding the process and the benefits can empower individuals to make informed decisions. In this article, we'll explore the key aspects of bankruptcy in NM.
Types of Bankruptcy Available
In NM, individuals primarily file for Chapter 7 or Chapter 13 bankruptcy. Each type serves different needs and circumstances.
Chapter 7 Bankruptcy
Chapter 7, also known as liquidation bankruptcy, allows debtors to discharge most unsecured debts. It's ideal for those without significant assets.
- Eligibility: Means test requirement must be passed.
- Process: Involves liquidating non-exempt assets.
- Duration: Typically resolved within a few months.
Chapter 13 Bankruptcy
Chapter 13, or reorganization bankruptcy, is suited for individuals with a regular income who wish to keep their assets.
- Eligibility: Debts must be within specific limits.
- Process: Create a repayment plan lasting three to five years.
- Benefit: Retain property while repaying debts over time.
Steps to File for Bankruptcy
- Credit Counseling: Mandatory session with an approved agency.
- Filing the Petition: Submit necessary forms and documents to the court.
- Automatic Stay: Protection from creditors' collection activities.
- Meeting of Creditors: Attend a meeting led by the trustee.
Benefits of Filing Bankruptcy
Filing for bankruptcy in NM offers several advantages:
- Debt Relief: Discharge most unsecured debts and start anew.
- Protection from Creditors: Automatic stay halts collection efforts.
- Asset Exemption: Retain certain assets under state law.
- Emotional Relief: Alleviate stress and anxiety associated with overwhelming debt.
For those considering this option, consulting with a professional, such as mesa bankruptcy lawyers, can provide valuable guidance tailored to individual needs.
Considerations Before Filing
Before deciding to file for bankruptcy, consider these factors:
- Impact on Credit Score: Bankruptcy can affect your credit for up to 10 years.
- Future Credit Opportunities: It may initially limit access to credit, although many find it easier to rebuild credit over time.
- Non-Dischargeable Debts: Some debts, like student loans and taxes, are typically not dischargeable.
For a broader perspective, even those outside NM may find insights by consulting with experts such as a milwaukee bankruptcy attorney.
Frequently Asked Questions
What debts are discharged in bankruptcy?
Most unsecured debts, like credit card debt and medical bills, can be discharged. However, certain debts like alimony, child support, and student loans typically remain.
How long does the bankruptcy process take?
The duration varies: Chapter 7 usually completes within four to six months, while Chapter 13 involves a three to five-year repayment plan.
Can I keep my car and home?
In Chapter 13, you can keep both by catching up on payments through the repayment plan. In Chapter 7, it depends on the equity and state exemptions.
To actually file, either you or your attorney, will need to file a two-page petition and several other forms at your New Mexico district bankruptcy court.
All filers pay a $338 filing fee in Chapter 7 unless the court grants a fee waiver and a $313 filing fee in Chapter 13 (amounts current as of January 2025). You ...
Filing Bankruptcy Online (eSR), Filing Documents, Filing A Proof Of Claim, Procedures, Forms & Local Rules, General and Administrative Orders, Local Forms.
